Mr. Smits's approach to business litigation is aggressive yet mindful that successful resolution of business disputes requires a cost-effective strategy designed to achieve the client's objectives.  Mr. Smits's ability to effectively represent his clients is due in large part to the fact that his experience and skill extend beyond litigation.  He is also skilled at presenting his clients' legal positions at trial.  This sets Mr. Smits apart from many business litigators, who may be skilled at pre-trial litigation but not as effective at presenting complex legal and factual matters to a jury or judge at trial.

However, in some circumstances, vigorous litigation and trial of a matter may not be in a client's best interests.  After 19 years of practice, Mr. Smits has developed a keen sense for discerning when to pursue alternative methods of dispute resolution and settlement negotiations.

Mr. Smits's business litigation practice is diverse and challenging.  The following are some examples of the breadth and nature of his practice, as well as the results he has achieved for his clients:

1.         Recent Judgment:  Mr. Smits represents one of the nation's largest telephone and communications services companies in litigation throughout California.  In September 2008, Mr. Smits obtained a judgment for his client in an amount exceeding $3.5 million.

2.         The Interior Designer Case:  Mr. Smits successfully defended his client against abusive litigation pursued by an interior designer involving a multi-million dollar, waterfront home in Newport Beach, California.  The interior designer sued for a six-figure amount in alleged damages.  Mr. Smits's client paid nothing to the interior designer.

            The plaintiff / interior designer leased a bay-front home in Newport Beach.  The interior designer claimed she had an oral agreement with the owner (who was ill and suffered from failing mental capacity) to remodel the home while she lived in it.  The interior designer extensively remodeled the home and ran up a bill in the six figures.  The owner of the home died several months after the interior designer completed the remodel.  The interior designer waited until after the owner's death to submit her bill for services rendered and costs incurred.  The bill was submitted to the owner's brother, who served as trustee of his deceased brother's estate. The estate refused to pay any portion of the interior designer's bill.  The interior designer sued, and Mr. Smits represented the trustee of the estate.

            In defending against the lawsuit, Mr. Smits asserted that the interior designer was barred from suing on the alleged oral contract because the interior designer acted as a general contractor and did not have a contractor's license issued by the State of California.  (In contrast, interior designers are not required to have a license in California; therefore, the lack of a license would not have been a bar to an action based on breach of contract.)  Mr. Smits obtained discovery showing that the interior designer acted as a general contractor and did not have the required contractor's license.  Mr. Smits brought a motion seeking dismissal of the interior designer's lawsuit based on the lack of a license, and he also filed a cross-complaint against the interior designer for sums initially paid to her by the deceased owner.  The theory underlying the cross-complaint was that the interior designer did not have a contractor's license and therefore is required to turn over all sums she received in payment for unlicensed work.  Immediately after Mr. Smits filed the foregoing in court, the interior designer agreed to settle the case by dismissing her complaint and taking nothing from Mr. Smits's client.

3.         The Bakery Case (State Court and Bankruptcy Court Litigation):  In a two-week jury trial, Mr. Smits obtained a defense verdict for his client, a family-run, national bakery business, involving a multi-million dollar claim based on breach of contract, fraud and related business torts.  At the conclusion of the trial, he obtained a six-figure attorney fee and costs award in favor of his client and against the plaintiff who sued his client.

The plaintiff refused to pay the judgment and filed for bankruptcy protection in order to avoid the judgment.  However, the plaintiff's bankruptcy filing did not stop Mr. Smits.  Mr. Smits took aggressive action in the bankruptcy proceeding and obtained a ruling from the bankruptcy judge dismissing the plaintiff's bankruptcy case, thereby leaving the plaintiff without the protections afforded by bankruptcy law.  But, the chase did not stop there.

Mr. Smits obtained information concerning the plaintiff's real property holdings and learned that the plaintiff illegally transferred title to a valuable piece of ocean-view real estate to a corporation the plaintiff owned and controlled.  In response to this illegal transfer of assets, Mr. Smits filed a fraudulent transfer action in state court against the plaintiff (and his corporation) and imposed a lis pendens on the real estate.   Subsequently, the plaintiff sold the real estate, and Mr. Smits's client was paid from escrow the full amount of its judgment plus the additional attorney fees and costs incurred in the post-trial efforts to collect the judgment.

4.         The Importer Case (State Court and Bankruptcy Court Litigation):  In another instance of skillfully litigating in the state court as well as the federal bankruptcy court, Mr. Smits helped his client, an importer and broker of various types of goods, recover from a corporation who owed Mr. Smits's client in excess of $970,000.  Mr. Smits also recovered sums from the debtor corporation's three personal guarantors.   Mr. Smits initiated action against the corporation and its guarantors (collectively "the debtors") by bringing suit in state court.  In addition to filing the lawsuit, Mr. Smits took aggressive action to obtain pre-judgment liens on the debtors' property.  The effect of such a pre-judgment remedy is to lien the debtors' assets during the pendency of the state court litigation.   Mr. Smits's efforts caused all the debtors to file for bankruptcy protection, which in many instances would have signaled the end of the pursuit. However, Mr. Smits pursued the debtors into bankruptcy court.

In bankruptcy court, Mr. Smits challenged and objected to the corporate debtor's proposed Chapter 11 plan of reorganization, which treated Mr. Smits's client unfairly by failing to allow for a just repayment of his client's $970,000 claim.  After protracted litigation and hearings on the debtor's plan of reorganization, the bankruptcy judge agreed with Mr. Smits and declined to approve the reorganization plan.  Thereafter, the bankruptcy judge converted the Chapter 11 case to a Chapter 7 liquidation case, during which a substantial portion of the client's claim was paid.  Concurrent with litigation concerning the corporate debtor's reorganization plan, Mr. Smits took action to enforce his client's security interest in the corporation's assets and obtained relief from the automatic stay to obtain assets in partial satisfaction of the debt.

Mr. Smits also pursued the guarantors in their separate Chapter 7 bankruptcy cases.  One of the guarantors attempted to hide income from an asset, which Mr. Smits pointed out to the Chapter 7 trustee, who is charged with the duty of marshalling all of a debtor's assets for the benefit of the debtor's creditors.  Also, Mr. Smits took action to assist the trustee to sell an asset for which there is a very small market.  The trustee eventually sold the asset and a substantial portion of the sale proceeds was set aside for payment to creditors, including Mr. Smits's client.  In addition, Mr. Smits objected to the guarantor's discharge from bankruptcy where the guarantor would have been permitted to keep her home and not fully satisfy creditors' claims.  Mr. Smits pointed out to the trustee that a significant amount of equity had accumulated in the guarantor's home, since the filing of the bankruptcy case. Noting that the guarantor's home was located in the red-hot Southern California real estate market, Mr. Smits contended that the trustee's appraisal performed at the beginning of the bankruptcy case was over two years' old and not representative of the current fair market value of the guarantor's home.  The trustee agreed with Mr. Smits, obtained a new appraisal of the home and found in excess of $200,000 in home equity available to creditors, the vast majority of which was paid to Mr. Smits's client.

5.         The "Alter Ego" Case:  In a breach of contract case against a mortgage broker corporation, Mr. Smits also pursued the owner and controlling person of the corporation on an alter ego theory of liability.  This theory of liability provides that the owner or controlling person of a corporation can be held liable for the debts of the corporation under certain circumstances.  In the case involving Mr. Smits's client, the owner of the corporation vigorously defended against the alter ego claim and contended that he should not be liable for the corporation's debt, because he did not sign the contract that was breached.  Mr. Smits was not deterred. 

Mr. Smits sought a pre-judgment attachment lien against the real and personal property held by the corporation's owner.  After Mr. Smits conducted written discovery and took the deposition of the corporation's owner concerning alter ego issues, the superior court judge considered the evidence obtained by Mr. Smits, found the person likely to be the alter ego of the corporation, and granted Mr. Smits's request for a pre-judgment attachment lien on the real and personal property owned by the individual. 

A couple months later and while the litigation was still pending against the corporation and its owner, the owner of the corporation attempted to refinance one of his homes.  However, he could not complete the refinancing transaction without satisfying the pre-judgment attachment lien obtained by Mr. Smits.  The case was resolved after Mr. Smits's client was paid from escrow the full amount of the damages sought on the breach of contract claim plus all the attorney fees and costs incurred by the client in the litigation. 

Mr. Smits's use of the alter ego theory to obtain pre-judgment relief against the alter ego of a corporation was extraordinary, yet typical of Mr. Smits's tenacity and creativity in collecting the sum due his client.

6.         The Fraud-On-Creditors Case:  In an action to recover sums due under a commercial real property lease, Mr. Smits represented a nationally-recognized REIT that owns in excess of $1 billion in commercial properties.  During the deposition of the corporation that breached the commercial lease, Mr. Smits learned the corporation's owners sold all the corporate assets for tens of millions of dollars and transferred the sale proceeds to themselves, leaving the corporation without sufficient assets to pay the amount due Mr. Smits's client.  Upon learning this information, Mr. Smits obtained the court's approval to amend the complaint to add as defendants the two owners of the company, who transferred all the sale proceeds (corporate assets) to themselves.  Shortly thereafter, the defendants agreed to pay the full amount due under the lease plus attorney fees and costs incurred by Mr. Smits's client.

7.         The Insurance Bad-faith Case (First Jury Trial):  In his first jury trial, Mr. Smits obtained a six-figure verdict in favor of his client, a small, family-run business, and against the client's insurance company, where the insurance company had abandoned it's insured (Mr. Smits's client) and failed to resolve a personal injury claim that potentially could have ruined the family-run business.

8.         Successful Defense of Multi-million Dollar Tort Claims:  Mr. Smits successfully defended his client, a family-run office furniture company, by obtaining a summary judgment against the plaintiff in an action involving multi-million dollar tort claims.  However, the case was not over.  In a two-week bench trial involving another party to the litigation, Mr. Smits successfully defended against the vast majority of a cross-complainant's claims, which were in excess of $2.5 million.  The cross-complainant, a large governmental entity represented throughout the trial by a handful of pricey, big-firm lawyers, came away with a small fraction of its original multi-million dollar claim.

9.         The Commercial Law Case (Federal and State Court Litigation):  In a case involving issues arising under Article 2 of the Uniform Commercial Code, Mr. Smits filed suit on behalf of his client in California state court against a Texas corporation.  The Texas defendant sought removal of the case to federal court and was represented by a prestigious, large law firm in Texas.  Mr. Smits filed papers objecting to the removal and sought to have the matter remanded to state court.  In light of the strength of Mr. Smits's papers filed in federal court, the Texas defendant sensed defeat and hurried to settle the matter before the federal judge ruled on Mr. Smits's request.  Mr. Smits obtained a settlement wherein his client recovered over 90% of the amount of his claim and the expenses associated with protracted litigation were avoided.

10.       Successful Defense of Premises Liability Case:  Mr. Smits successfully defended a national, commercial construction company in a premises liability action.  The plaintiff claimed in excess of $150,000 in personal injury damages.  While preparing to take the plaintiff's deposition, Mr. Smits investigated the plaintiff's litigation background and learned that the plaintiff had filed several personal injury lawsuits against "deep-pocket" defendants in prior years.  At the deposition of the plaintiff, Mr. Smits fully examined the plaintiff regarding her litigation history and learned that her specious allegations in the pending lawsuit were nearly identical to allegations she made in a lawsuit against a different defendant a few years earlier.  At the conclusion of the deposition, the plaintiff's credibility was in shambles, and her attorney, who was completely unaware of his client's litigation history, proposed a settlement favorable to Mr. Smits's client.  Shortly thereafter, the matter was settled.

11.       The Lack of Personal Jurisdiction Case (Successful Defense of Non-resident Defendant):  Mr. Smits obtained an early dismissal of a lawsuit filed in California against his client, a small business owner located in North Carolina, and thereby saved his client thousands of dollars in legal fees and costs that otherwise would have been spent in defending against the California lawsuit.  Mr. Smits's client was the victim of an internet-based business located in California that charged his North Carolina client for services that were never provided.  When Mr. Smits's client refused to pay for the "services," the fraudulent business operator in California sued the North Carolina client in a California court in an effort to recover payment for the alleged services.  In the initial response to the lawsuit, Mr. Smits filed a motion to quash service of the summons and complaint served on the North Carolina client.  Mr. Smits argued that the California court did not have jurisdiction over his client, and that under California law his client could not be sued in California.  The court agreed and dismissed the case against the client.